Ireland Pensions Update 

Pensions Ireland

Pensions Update June 2024 

The Greek philosopher Heraclitus famously said, “The only constant is change.” This is certainly the case in the pensions landscape, which continues to develop at a rapid pace. As stakeholders in the pensions industry continue to try to navigate these changes, we have highlighted below some of the current pensions and benefits issues that sponsoring employers, trustees and members should be aware of.  

For further information in relation to any of these matters, please contact us.

Industry Developments 

Auto-enrolment (AE)

In the most significant change, the Automatic Enrolment Retirement Savings System Bill 2024 was published on 5 April 2024. The Government has stated that it expects the Bill to be passed into law before the summer break and progress is on track, taking into account its current stage in the legislative process.

Minister for Social Protection Heather Humphreys stated, “This represents one of the biggest reforms of the pension system in the history of the State, and is an important milestone in supporting people in their retirement years.”

The Government has stated that it expects the first enrolments into the central AE system to take place in January 2025. All employees within scope will be automatically enrolled into the central system unless they are in “exempt employment.” This means employment where either employer or employee contributions are being paid through payroll to a qualifying occupational pension scheme, Personal Retirement Savings Account, trust Retirement Annuity Contract or Pan-European Personal Pension Product. The Government is actively urging employers to “plan and budget” for AE.

For further information on AE,  listen back to our latest podcast and read more here

What should employers do now?

It is important for employers to prepare for what’s coming. This means understanding what AE might mean for them, including the potential operational challenges, cost implications over time and how their current pension scheme could be affected. Undertaking a high-level gap and cost analysis will provide an important indication of what employers can expect.

What does this mean for trustees?

Trustees will need to communicate with the sponsoring employer to request information on any likely implications for and impacts on the scheme following the review and decisions undertaken by the employer.

Mercer can help employers understand the implications of AE on their business with a checklist of items to consider. Please contact us for further information. 

State Pension 

The Social Welfare (Miscellaneous Provisions) Act 2023 introduced reforms with effect from 1 January 2024 aimed at addressing increasing longevity that results in more people availing of State pensions for longer.

The measures include the following.

  • The State Pension age is to remain at 66.
  • A new voluntary flexible option is introduced for those reaching 66 on or after 1 January 2024, allowing employees the flexibility to defer drawing down their State Pension up to age 70. Where the State Pension is deferred, PRSI contributions are payable by the employer and employer in return for a higher State Pension (subject to maximum limits).
  • From January 2025, there will be a 10-year phased removal of the Yearly Average Method, which means that all pensions will be calculated using only the Total Contributions Approach by 2034.
  • The long-term sustainability of the State Pension system is to be addressed through a gradual, incremental increase in social insurance rates. The Government has signed off on a plan to increase PRSI by 0.70% over five years. Under the plan, there will be incremental increases in all classes of PRSI for employers, employees and the self-employed. This begins with a 0.1% hike in October 2024.

The Heads of Bill has been published for the Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024. The proposal removes any mandatory retirement age that is below the State Pension age. If an employee provides written notice to their employer that they do not consent to the mandatory retirement age, the employer must not retire them before they qualify for the State Pension. While the Heads of Bill states that “Nothing in this Act shall affect any pension scheme,” it remains to be seen whether the final published Act will include this provision.

What should employers do now?

Longer working and flexible retirement may become a more significant issue for employers. Once the Bill is published, employers should consult with trustees of their pension scheme to assess whether flexible options will impact on the design of the retirement and death benefits being provided and whether amendments to the scheme’s rules will be required.

Mercer can help employers understand the implications of the State’s new flexible options and the impact on their business. Please contact us for further information. 

Review of the Standard Fund Threshold (SFT) regime

The SFT is the limit on the total capital value of tax-relieved pension benefits that an individual can draw down in their lifetime from all of their pension arrangements. The SFT, which was introduced in December 2005, has remained at €2 million since 2014, and the Government has acknowledged that it has been 10 years since the limit was reviewed. The SFT limit is now being reviewed, taking into consideration the impact of any change on the overall tax expenditure associated with pension provision and its associated distribution, and the need for equity in treatment across taxpayer groups and between public and private sector workers. The review will take account of the Commission on Taxation’s recommendation that the SFT limit be set at “an appropriate and fair level of estimated retirement income.”

The results of the examination will be presented to the Minister for Finance for consideration by summer 2024.

Supreme Court judgment – Widower’s Contributory Pension

The Government is considering legislative changes following a Supreme Court judgment that an unmarried father is entitled to a widower’s contributory pension. The court ruled in favour of an individual whose long-term partner had died. They had three children but were not married. The court found that social welfare legislation limiting the payment to married or civil partnership couples was invalid and discriminatory. It stated that the distinction between married and non-married parents was arbitrary and failed to hold parents equal before the law. The decision will require the Oireachtas to bring in legislation to give effect to the ruling.

While this does not relate directly to occupational pension schemes, trustees and employers should be mindful that rules in a pension scheme that provide spouses’ pensions only where the member is married could be challenged following the implementation of this legislation. 

Pensions Authority Recent Activity 

Supervisory review process (SRP)

The Authority advised that the SRP programme will commence in 2024, focusing on master trusts and large defined contribution and defined benefit schemes. The SRP will cover strategies, processes and reporting procedures established by trustees and the Authority will assess schemes’ systems of governance and how risks are monitored and managed.

Schemes selected for the SRP will be provided with information on the SRP process in advance. For those schemes selected for SRP in 2024, the Authority has formally notified the relevant trustee boards.

Mercer can help trustees with the new regulatory supervision. Please contact us for further information.


Digital Operational Resilience Act (DORA)

DORA was adopted by the European Parliament and came into force on 16 January 2023. It will be directly effective from 17 January 2025. It applies to all “financial institutions,” which includes occupational pension schemes with 15 or more members.

Institutions for occupational retirement provision with fewer than 15 members are excluded and those with fewer than 100 members are subject to a “simplified” risk management framework.

DORA imposes uniform requirements on financial institutions relating to the security of network and information systems. It creates a regulatory framework for digital operational resilience whereby financial entities will need to make sure they can withstand, respond to and recover from IT disruptions and threats.

The main requirements for schemes include the following.

  • Schemes must have a sound, comprehensive and well-documented information communications technology (ICT) risk management framework as part of their overall risk management system, including strategies, policies, procedures, ICT protocols and tools. ICT is any technological tool used to communicate information (for example, software applications or member portals).
  • The ICT framework must be reviewed at least once a year.
  • Reports on the review must be submitted to the Authority on request.
  • Schemes must have a comprehensive testing programme.
  • Schemes should review any contractual (outsourcing) arrangements to ensure that they will comply with DORA.

Given the timeline involved, trustees should engage with their advisors and put in place a plan for meeting these DORA requirements by 17 January 2025.

Mercer can help trustees implement a plan for DORA compliance. Please contact us for further information. 



There was a busy start to 2024, with trustees completing the own risk assessment and critical reviews. Trustees are now scheduling their actions arising out of these reviews over the next three-year cycle as well as ensuring compliance with the other governance requirements set out in the code of practice for trustees.

Appointing a scheme secretary to run meetings, maintain a scheme master register, and help ensure governance obligations are being met can greatly assist trustees in keeping on top of their governance requirements.  

Mercer can help trustees with their scheme secretarial services. Please contact us for further information. 

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